Since the global financial crisis of 2008/2009, there has been no challenge to the financial and banking system comparable to that during the Corona crisis.

Weak profitability, unresolved regulatory challenges and increasing competition in the digital sector pose further challenges for banks.

The stability of the financial system and access to financial markets was not at risk during the pandemic. Through joint efforts and better bank capitalisation, the financial system is now more resilient than during the financial crisis.

Provided that grants and loans in the “next generation EU” fund are well targeted for structural reforms and investments in the future, this should boost confidence and growth.

However, further improvements in financial stability, such as increased capital requirements, regulation of shadow banks or reforms in financial supervision, are needed.

You can read the full report as a PDF here.